XXXXXXXX EXHIBIT 4.65
CHANCE
CONFORMED COPY
[CHINESE CHARACTERS]
DATED 19 MAY 2003
MARCONI CORPORATION PLC
as Chargor
and
THE LAW DEBENTURE TRUST CORPORATION P.L.C.
as Security Trustee
----------------------------------------------------
G.E.C. SHARES CHARGE
----------------------------------------------------
CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION........................................... 1
2. CHARGE................................................................... 3
3. DEPOSIT OF CERTIFICATES and OTHER DOCUMENTS.............................. 4
4. VOTING RIGHTS AND DIVIDENDS.............................................. 5
5. NEGATIVE PLEDGE AND DISPOSALS............................................ 6
6. FURTHER ASSURANCE........................................................ 6
7. POWER OF SALE............................................................ 7
8. RECEIVER................................................................. 7
9. APPLICATION OF MONEYS.................................................... 10
10. PROTECTION OF PURCHASERS................................................. 10
11. POWER OF ATTORNEY........................................................ 10
12. EFFECTIVENESS OF SECURITY................................................ 11
13. SUBSEQUENT SECURITY INTERESTS............................................ 12
14. ASSIGNMENT............................................................... 12
15. NOTICES.................................................................. 12
16. EXPENSES, COSTS AND TAXES................................................ 12
17. PAYMENTS FREE OF DEDUCTION............................................... 13
18. DISCRETION AND DELEGATION................................................ 14
19. PERPETUITY PERIOD........................................................ 14
20. RELEASE OF SECURITY...................................................... 14
21. GOVERNING LAW............................................................ 14
22. JURISDICTION............................................................. 14
23. COUNTERPARTS............................................................. 15
SCHEDULE 1 PARTICULARS OF SHARES................................................ 16
SCHEDULE 2 FORM OF ACKNOWLEDGEMENT FROM NOMINEE................................. 17
SCHEDULE 3 FORM OF LETTER OF WAIVER AND UNDERTAKING............................. 19
SCHEDULE 4 FORM OF NOTICE TO THE COMPANY AND ACKNOWLEDGEMENT.................... 21
THIS SHARES CHARGE is made on 19 May 2003
BETWEEN
(1) MARCONI CORPORATION PLC, a company incorporated under the laws of
England, registered in England and Wales with company number 00067307
(the "CHARGOR"); and
(2) THE LAW DEBENTURE TRUST CORPORATION P.L.C. as security trustee for the
Secured Creditors on the terms and conditions set out in the Security
Trust and Intercreditor Deed (the "SECURITY TRUSTEE" which expression
shall include any person for the time being appointed as trustee or as
an additional trustee for the purpose of, and in accordance with, the
Security Trust and Intercreditor Deed).
NOW THIS SHARES CHARGE WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Terms defined in the Security Trust and Intercreditor Deed shall,
unless otherwise defined in this Shares Charge, bear the same meaning
when used in this Shares Charge and in addition:
"CHARGED PORTFOLIO" means the Shares and the Related Assets.
"COLLATERAL RIGHTS" means all rights, powers and remedies of the
Security Trustee provided by this Shares Charge or by law.
"COMPANY" means G.E.C. (Hong Kong) Limited, a company incorporated
under the laws of Hong Kong with company number 21763.
"ENFORCEMENT EVENT" has the meaning given to such term in the Security
Trust and Intercreditor Deed.
"NEW BONDING FACILITY AGREEMENT" means the (pound)50 million committed
revolving bonding facility agreement dated 27 March 2003 among Marconi
Corporation, Marconi Bonding Limited, HSBC Bank plc as agent and
security trustee, the lenders described thereunder and certain other
Subsidiaries providing for the issuance of surety bonds, appeal bonds,
bid bonds, performance bonds, letters of credit, bank guarantees or
other obligations of a like nature on behalf of the Chargor and/or any
Subsidiary, as such agreement may be amended, extended, supplemented or
otherwise modified from time to time (including, without limitation,
any successive amendments, extensions, supplements or other
modifications of the foregoing).
"RECEIVER" means a receiver or receiver and manager of the whole or any
part of the Charged Portfolio.
"RELATED ASSETS" means all dividends, interest and other monies payable
in respect of the Shares and all other rights, benefits and proceeds in
respect of or derived from the Shares (whether by way of redemption,
bonus, preference, option, substitution, conversion or otherwise).
- 1 -
"SECURED OBLIGATIONS" means all present and future indebtedness
liabilities and obligations (for the avoidance of doubt, including any
liabilities and obligations which have been cash-collateralised by the
Chargor) at any time of the Chargor under the Relevant Documents, both
actual and contingent and whether incurred solely or jointly or in any
other capacity together with any of the following matters relating to
or arising in respect of those liabilities and obligations:
(a) any refinancing, novation, deferral or extension;
(b) any obligation relating to any increase in the amount of such
obligations;
(c) any claim for damages or restitution; and
(d) any claim as a result of any recovery by the Chargor of a
payment or discharge, non-allowability, on the grounds of
preference,
and any amounts that would be included in any of the above but for any
discharge, non-provability or unenforceability of those amounts in any
insolvency or other proceedings (including interest accruing after the
commencement of any insolvency or other proceedings).
"SECURITY TRUST AND INTERCREDITOR DEED" means the security trust and
intercreditor deed dated on or about the date hereof between, amongst
others, the Security Trustee, the Chargor and other obligors, Law
Debenture Trust Company of New York as senior note trustee and JPMorgan
Chase Bank as junior note trustee.
"SHARES" means all of the shares in the share capital of the Company
from time to time held by, to the order or on behalf of the Chargor at
any time, including those described in Schedule 1 (PARTICULARS OF
SHARES).
1.2 INTERPRETATION
In this Shares Charge:
1.2.1 the rules of interpretation contained in clause 1.2
(Interpretation) of the Security Trust and Intercreditor Deed
shall apply to the construction of this Shares Charge;
1.2.2 "continuing" in relation to an Enforcement Event, shall be
construed as a reference to an acceleration of any Secured
Obligation (other than Secured Obligations arising under the
New Bonding Facility Agreement) where such acceleration has
not been rescinded in writing or a declaration that the
Secured Obligations (other than Secured Obligations arising
under the New Bonding Facility Agreement) are prematurely due
and payable (other than solely as a result of it becoming
unlawful for a Secured Creditor to perform its obligations
under the Relevant Documents) where such declaration has not
been revoked in writing or any failure by an Obligor to pay
any principal amount in respect of any Secured Obligations
(other than Secured Obligations arising under the New Bonding
Facility Agreement) whether on maturity or otherwise which has
not been remedied or waived in writing. For the purposes of
this sub-clause 1.2.2,
- 2 -
the definition of "Secured Obligations" shall have the same
meaning as in the Security Trust and Intercreditor Deed;
1.2.3 any reference to the "SECURITY TRUSTEE", the "CHARGOR" or the
"SECURED CREDITORS" shall be construed so as to include its or
their (and any subsequent) successors in title and any
permitted assignees and transferees in accordance with their
respective interests; and
1.2.4 references in this Shares Charge to any Clause or Schedule
shall be to a clause or schedule contained in this Shares
Charge.
1.3 HONG KONG
In this Shares Charge, "HONG KONG" means the Hong Kong Special
Administrative Region of the People's Republic of China.
1.4 SECURITY TRUST AND INTERCREDITOR DEED
The parties hereto each acknowledge that the Security Trustee, when
acting hereunder, shall be acting in accordance with and subject to the
terms of the Security Trust and Intercreditor Deed.
1.5 CONFLICT
Notwithstanding any provision to the contrary contained herein, the
parties agree that this Shares Charge is subject in all respects to the
terms of the Security Trust and Intercreditor Deed and for the
avoidance of doubt, in the event of any inconsistency, the provisions
of the Security Trust and Intercreditor Deed shall prevail.
2. CHARGE
2.1 The Chargor charges the Charged Portfolio, as beneficial owner and by
way of first fixed charge, in favour of the Security Trustee for the
payment and discharge of all of the Secured Obligations.
2.2 The liability of the Chargor under this Shares Charge shall be limited
such that neither the obligations of the Chargor under this Shares
Charge nor the security constituted by this Shares Charge nor any other
provisions of this Shares Charge shall include or extend to secure or
guarantee any liability or sum which would, but for this provision,
cause this Shares Charge, the security constituted by this Shares
Charge or other provisions of this Shares Charge to be unlawful or
prohibited by any applicable law (including, for the avoidance of
doubt, Section 151 of the Companies Xxx 0000 of the United Kingdom).
2.3 NO LIABILITY FOR CALLS
Nothing in this Shares Charge shall be construed as placing on the
Security Trustee any liability whatsoever in respect of any calls,
instalments or other payments relating to any of the Charged Portfolio
or any rights, shares or other securities accruing, offered or arising
as aforesaid, and the Chargor shall indemnify the Security Trustee in
respect of all calls, instalments or other payments relating to any of
the Charged Portfolio and to any rights, shares and other securities
accruing, offered or arising as aforesaid in respect of any of the
Charged Portfolio.
- 3 -
2.4 REPRESENTATION
The Chargor represents and warrants to the Security Trustee that:
2.4.1 it and its nominee (specified in Schedule 1 (Particulars of
Shares)) are the sole legal owners and it is the beneficial
owner of the Shares free from any Security (as such term is
defined in the Security Trust and Intercreditor Deed) except
as created by this Shares Charge; and
2.4.2 the Shares are fully paid up.
3. DEPOSIT OF CERTIFICATES AND OTHER DOCUMENTS
3.1 The Chargor shall, within 10 Business Days of the date of this Shares
Charge, deposit (or procure the deposit of) with or to the order of the
Security Trustee or with such Delegate as the Security Trustee may
appoint for this purpose:
(a) all certificates and other documents of title to the Shares;
(b) all undated sold notes and instruments of transfer in respect
of the Shares (in each case executed in blank by or on behalf
of the Chargor or any person acting as its nominee);
(c) a letter of waiver and undertaking executed by each member of
the Company in substantially the form set out in Schedule 3
(Form of Letter of Waiver and Undertaking); and
(d) an acknowledgment from each person (if any) holding any Shares
as the Chargor's nominee in substantially the form set out in
Schedule 2 (Form of Acknowledgement from Nominee).
3.2 The Chargor shall:
(a) within 10 Business Days of the date of this Shares Charge give
notice to the Company in substantially the form of the notice
set out in Schedule 4 (Form of Notice to the Company and
Acknowledgement) and shall procure that the Company shall
promptly execute an acknowledgement to such notice in the form
of the acknowledgement set out in Schedule 4 (Form of Notice
to the Company and Acknowledgement); and
(b) deliver to the Security Trustee copies of such notice and
acknowledgement promptly upon giving or, as the case may be,
receipt of the same.
3.3 The Chargor shall, promptly upon the accrual, offer or issue of any
Related Assets (in the form of stocks, shares, warrants or other
securities) in which the Chargor has a beneficial interest, notify the
Security Trustee of that occurrence and procure the delivery to the
Security Trustee or to the order of the Security Trustee of:
(a) all certificates and other documents of title representing
such Related Assets; and
- 4 -
(b) all undated sold notes and instruments of transfer (executed
in blank by or on behalf of the Chargor or any person acting
as its nominee) in respect of such Related Assets.
3.4 The Chargor shall, promptly upon any person (other than the Chargor,
the Security Trustee and any nominee of the Security Trustee or any
purchaser of any Shares upon enforcement of the security over such
Shares created by or pursuant to this Shares Charge) becoming a member
of the Company after the date of this Shares Charge, notify the
Security Trustee and procure the delivery to the Security Trustee of a
letter of waiver and undertaking executed by such person and in
substantially the form set out in Schedule 3 (Form of Letter of Waiver
and Undertaking).
3.5 If any Share or Related Asset is being held by a person (other than the
Chargor) as the Chargor's nominee, the Chargor shall promptly notify
the Security Trustee and shall procure that such nominee and each
successor thereof shall, as soon as such person becomes the Chargor's
nominee, execute and deliver to the Security Trustee an acknowledgement
in respect of such Share, or as the case may be, such Related Asset in
substantially the form set out in Schedule 2 (Form of Acknowledgement
from Nominee).
4. VOTING RIGHTS AND DIVIDENDS
4.1 Prior to the occurrence of an Enforcement Event and at any time when no
Enforcement Event is continuing, the Chargor shall:
4.1.1 be entitled to retain all dividends, interest and other monies
arising from the Shares; and
4.1.2 exercise all voting rights in relation to the Shares PROVIDED
THAT the Chargor shall not exercise such voting rights in any
manner which would constitute a Default or an Event of Default
under the Indentures (as such terms are defined in the
Indentures).
4.2 The Security Trustee may, upon the occurrence of an Enforcement Event
and at any time thereafter while such Enforcement Event is continuing,
(in the name of the Chargor or otherwise and without any further
consent or authority from the Chargor):
(a) exercise (or refrain from exercising) any voting rights in
respect of all or any part of the Charged Portfolio;
(b) apply all dividends, interest and other monies arising from
all or any part of the Charged Portfolio in accordance with
Clause 9 (Application of Moneys);
(c) transfer all or any part of the Charged Portfolio into the
name of such nominee(s) of the Security Trustee as it shall
require;
(d) give notice to the Company as contemplated under the notice
which the Chargor is required to have delivered to the Company
pursuant to Clause 3.2(a); and
(e) exercise (or refrain from exercising) the powers and rights
conferred on or exercisable by the legal or beneficial owner
of all or any of the Charged Portfolio, including the right to
concur or participate in:
- 5 -
(i) the reconstruction, amalgamation, sale or other
disposal of the Company or any of its assets or
undertaking (including the exchange, conversion or
reissue of the shares or securities of the Company as
a consequence thereof);
(ii) the release, modification or variation of any rights
or liabilities attaching to the shares or securities
of the Company; and
(iii) the exercise, renunciation or assignment of any right
to subscribe for any shares or securities of the
Company,
in each case in such manner and on such terms as the Security
Trustee may think fit, and the proceeds of any such action
shall form part of the Charged Portfolio.
5. NEGATIVE PLEDGE AND DISPOSALS
5.1 The Chargor undertakes that it shall not, at any time during the
subsistence of this Shares Charge, create or permit to subsist any
Security over all or any part of the Charged Portfolio except as not
expressly prohibited under the terms of the Indentures.
5.2 The Chargor undertakes that it shall not (and shall not agree to) at
any time during the subsistence of this Shares Charge, except as not
expressly prohibited under the terms of the Indentures:
5.2.1 execute any conveyance, disposition, transfer, lease,
assignment or assignation of, or other right to use, all or
any part of the Charged Portfolio; or
5.2.2 create any legal or equitable estate or heritable interest or
other interest in, or over, or otherwise relating to, all or
any part of the Charged Portfolio.
6. FURTHER ASSURANCE
6.1 The Chargor shall promptly do all such acts or execute all such
documents (including assignments, transfers, mortgages, charges,
notices and instructions) as the Security Trustee may specify (and in
such form as the Security Trustee may require in favour of the Security
Trustee or its nominee(s)):
6.1.1 to perfect the Security created or intended to be created in
respect of the Charged Portfolio (which may include the
execution by the Chargor of a mortgage, charge or assignment
over all or any of the assets constituting, or intended to
constitute, the Charged Portfolio) or for the exercise of the
Collateral Rights; and/or
6.1.2 to facilitate the realisation of the Charged Portfolio.
6.2 If so requested by the Security Trustee the Chargor shall take all such
action as is available to it (including making all filings and
registrations) as may be necessary for the purpose of the creation,
perfection, protection or maintenance of any Security conferred or
intended to be conferred on the Security Trustee by or pursuant to this
Shares Charge.
- 6 -
7. POWER OF SALE
7.1 At any time after the occurrence of an Enforcement Event and the
Security Trustee (acting on the instructions received pursuant to the
terms of the Security Trust and Intercreditor Deed) giving notice to
the Chargor thereof, the security created by or pursuant to this Shares
Charge is immediately enforceable and the Security Trustee may, in its
absolute discretion (in the name of the Chargor or otherwise and
without further consent or authority from the Chargor), sell or
otherwise dispose of all or any part of the Charged Portfolio at the
times, in the manner and on the terms it thinks fit. The Security
Trustee shall be entitled to apply the proceeds of that sale or other
disposal in accordance with Clause 9 (Application of Moneys).
7.2 The restrictions contained in paragraph 11 of the Fourth Schedule to
the Conveyancing and Property Ordinance (Cap.219) shall not apply to
this Shares Charge or to the exercise by the Security Trustee of its
right to consolidate all or any of the security created by or pursuant
to this Shares Charge with any other security in existence at any time
or to its power of sale, which powers may be exercised by the Security
Trustee without notice to the Chargor on or at any time after the
occurrence of an Enforcement Event.
8. RECEIVER
8.1 After the occurrence of an Enforcement Event or if requested to do so
by the Chargor, the Security Trustee may by deed or otherwise (acting
through an authorised officer of the Security Trustee) without prior
notice to the Chargor:
(a) appoint one or more persons to be a Receiver of the whole or
any part of the Charged Portfolio;
(b) remove (so far as it is lawfully able) any Receiver so
appointed; and
(c) appoint another person(s) as an additional or replacement
Receiver(s).
8.2 Each person appointed to be a Receiver pursuant to Clause 8.1 shall be:
(a) entitled to act individually or together with any other person
appointed or substituted as Receiver;
(b) for all purposes deemed to be the agent of the Chargor, who
shall be solely responsible for his acts, defaults and
liabilities and for the payment of his remuneration and no
Receiver shall at any time act as agent for the Security
Trustee; and
(c) entitled to remuneration for his services at a rate to be
fixed by the Security Trustee from time to time.
8.3 In addition to the powers of the Security Trustee conferred by Clause
7.1 (Power of Sale), each Receiver shall (subject to any restrictions
in the instrument appointing him but notwithstanding any winding-up,
insolvency or dissolution of the Chargor) have and be entitled to
exercise, in relation to the part of the Charged Portfolio in respect
of which
- 7 -
he was appointed (in the name of or on behalf of the Chargor or in his
own name and, in each case, at the cost of the Chargor):
(a) all the powers and rights of an absolute owner and power to do
or omit to do anything which the Chargor itself could do or
omit to do (including without limitation the right to concur
or participate in any of the matters specified in sub-clauses
4.2(a) to 4.2(c), in each case in such manner and on such
terms as such Receiver may think fit, and the proceeds of any
such action shall form part of such Charged Portfolio);
(b) the power to do all things (including without limitation
bringing or defending proceedings in the name or on behalf of
the Chargor) which seem to the Receiver to be incidental or
conducive to (i) any of the functions, powers, authorities or
discretions conferred on or vested in him under this Shares
Charge or (ii) the exercise of the Collateral Rights
(including without limitation realisation of all or any part
of the Charged Portfolio) or (iii) bringing to his hands any
assets of the Chargor forming, or which when got in would be,
part of the Charged Portfolio; and
(c) all the powers conferred on him by general law.
8.4 Without prejudice to the generality of the foregoing, each Receiver
shall (subject to any restrictions in the instrument appointing him but
notwithstanding any winding-up, insolvency or dissolution of the
Chargor) have the following powers in relation to the part of the
Charged Portfolio (and any assets which, when got in, would be part of
such Charged Portfolio) in respect of which he was appointed (and every
reference in this Clause 8.4 to the "CHARGED PORTFOLIO" shall be read
as a reference to that part of the Charged Portfolio in respect of
which such Receiver was appointed):
(A) TAKE POSSESSION
power to take immediate possession of, collect and get in all
or any part of the Charged Portfolio including without
limitation all dividends, interests and other monies arising
therefrom or accruing thereto (whether accrued before or after
the date of his appointment) and without prejudice to the
foregoing, to cause to be registered all or any part of the
Charged Portfolio in its own name or in the name of its
nominee(s) or in the name of any purchaser(s) thereof;
(B) PROCEEDINGS AND CLAIMS
power to bring, prosecute, enforce, defend and abandon
applications, claims, disputes, actions, suits and proceedings
in connection with all or any part of the Charged Portfolio or
this Shares Charge in the name of the Chargor or in his own
name and to submit to arbitration, negotiate, compromise and
settle any such applications, claims, disputes, actions, suits
or proceedings;
(C) DEAL WITH CHARGED PORTFOLIO
- 8 -
power to sell, transfer, convey and/or dispose of all or any
part of the Charged Portfolio (in each case with or without
consideration) in such manner and on such terms as he thinks
fit;
(D) VOTING RIGHTS
exercise (or refrain from exercising) any or all of the voting
rights in respect of the Charged Portfolio or any part thereof
in such manner and on such terms as he thinks fit;
(E) APPOINTMENT AND REMOVAL OF DIRECTORS
complete, date and put into effect any sold note or instrument
of transfer and/or any other document(s) delivered pursuant to
Clause 3 (Deposit Of Certificates And Other Documents) and to
exercise all powers of appointment and/or removal of the
directors of the Company attaching to the Charged Portfolio or
any part thereof;
(F) ACQUISITIONS
power to purchase, lease, hire or otherwise acquire any assets
or rights of any description which he shall in his absolute
discretion consider necessary or desirable for the improvement
or realisation of the whole or any part of the Charged
Portfolio or otherwise for the benefit of the whole or any
part of the Charged Portfolio;
(G) REDEMPTION OF SECURITY
power to redeem, discharge or compromise any security whether
or not having priority to the security constituted by this
Shares Charge or any part of it;
(H) COVENANTS, GUARANTEES AND INDEMNITIES
power to enter into bonds, covenants, guarantees, commitments,
indemnities and other obligations or liabilities as he shall
think fit, to make all payments needed to effect, maintain or
satisfy such obligations or liabilities and to use the company
seal(s) (if any) of the Chargor; and
(I) EXERCISE OF POWERS IN CHARGOR'S NAME
power to exercise any of the above powers on behalf of and in
the name of the Chargor (notwithstanding any winding-up
insolvency or dissolution of the Chargor) or on his own
behalf.
8.5 In making any sale or other disposal of all or any part of the Charged
Portfolio or any acquisition in the exercise of their respective
powers, a Receiver or the Security Trustee may accept or dispose of as,
and by way of consideration for, such sale or other disposal or
acquisition, cash, shares, loan capital or other obligations, including
without limitation consideration fluctuating according to or dependent
upon profit or turnover and consideration the amount whereof is to be
determined by a third party. Any such consideration may, if thought
expedient by the Receiver or the Security Trustee, be nil or
- 9 -
may be payable or receivable in a lump sum or by instalments. Any
contract for any such sale, disposal or acquisition by the Receiver or
the Security Trustee may contain conditions excluding or restricting
the personal liability of the Receiver or the Security Trustee.
9. APPLICATION OF MONEYS
All moneys received or recovered by the Security Trustee or any
Receiver pursuant to this Shares Charge or the powers conferred by it
shall (subject to the claims of any person having prior rights thereto
and by way of variation of the provisions of the Conveyancing and
Property Ordinance (Cap. 219)) be applied first in the payment of the
costs, charges and expenses incurred and payments made by the Receiver,
the payment of his remuneration and the discharge of any liabilities
incurred by the Receiver in, or incidental to, the exercise of any of
his powers, and thereafter shall be applied by the Security Trustee
(notwithstanding any purported appropriation by the Chargor) in
accordance with the Security Trust and Intercreditor Deed.
10. PROTECTION OF PURCHASERS
10.1 The receipt of the Security Trustee or any Receiver shall be conclusive
discharge to a purchaser and, in making any sale or disposal of any of
the Charged Portfolio or making any acquisition, the Security Trustee
or any Receiver may do so for such consideration, in such manner and on
such terms as it thinks fit.
10.2 No purchaser or other person dealing with the Security Trustee or any
Receiver shall be bound to inquire whether the right of the Security
Trustee or such Receiver to exercise any of its powers has arisen or
become exercisable or be concerned with any propriety or regularity on
the part of the Security Trustee or such Receiver in such dealings.
11. POWER OF ATTORNEY
11.1 The Chargor hereby by way of security irrevocably (within the meaning
of Section 4 of the Powers of Attorney Ordinance (Cap. 31)) appoints
the Security Trustee, each Delegate and any Receiver severally to be
its attorney (the "ATTORNEY") and in its name, on its behalf and as its
act and deed to execute, deliver and perfect all documents (including
without limitation any sold notes and instruments of transfer) and do
all things which the Attorney may consider to be required or desirable
for:
(a) carrying out any obligation imposed on the Chargor by this
Shares Charge (including the execution and delivery of any
notices, deeds, charges, assignments or other security and any
transfers of the Charged Portfolio); and
(b) enabling the Security Trustee, each Delegate and any Receiver
to exercise, or delegate the exercise of, any of the rights,
powers and authorities conferred on them by or pursuant to
this Shares Charge or by law (including without limitation,
after the occurrence of an Enforcement Event, the exercise of
any right of a legal or beneficial owner of the Charged
Portfolio).
11.2 The Chargor shall ratify and confirm all things done and all documents
executed by any Attorney in the exercise or purported exercise of all
or any of his powers.
- 10 -
11.3 The Chargor shall indemnify the Attorney and keep the Attorney
indemnified against any and all costs, claims and liabilities which the
Attorney may incur as a result of anything done by the Attorney in the
proper exercise of any of the powers conferred, or purported to be
conferred, on him or her by this Shares Charge unless such cost, claim
or liability arises as a result of the negligence or wilful misconduct
of the Attorney.
12. EFFECTIVENESS OF SECURITY
12.1 The security created by or pursuant to this Shares Charge shall remain
in full force and effect as a continuing security for the Secured
Obligations unless and until discharged by the Security Trustee.
12.2 The security created by or pursuant to this Shares Charge and the
Collateral Rights shall be cumulative, in addition to and independent
of every other security which the Security Trustee or any Secured
Creditor may at any time hold for the Secured Obligations or any other
obligations or any rights, powers and remedies provided by law. No
prior security held by the Security Trustee (whether in its capacity as
trustee or otherwise) or any of the other Secured Creditors over the
whole or any part of the Charged Portfolio shall merge into the
security constituted by this Shares Charge.
12.3 The security created by or pursuant to this Shares Charge and the
Collateral Rights shall not be prejudiced by any unenforceability or
invalidity of any other agreement or document or by any time or
indulgence granted to the Chargor or any other person, or the Security
Trustee (whether in its capacity as trustee or otherwise) or any of the
other Secured Creditors or by any variation of the terms of the trust
upon which the Security Trustee holds the security or by any other
thing which might otherwise prejudice that security or any Collateral
Right.
12.4 No failure on the part of the Security Trustee to exercise, or any
delay on its part in exercising, any Collateral Right shall operate as
a waiver thereof, nor shall any single or partial exercise of any
Collateral Right preclude any further or other exercise of that or any
other Collateral Right.
12.5 None of the Security Trustee, each Delegate, any Attorney or any
Receiver shall be liable by reason of (a) taking any action permitted
by this Shares Charge or (b) any neglect or default in connection with
the Charged Portfolio or (c) taking possession of or realising all or
any part of the Charged Portfolio, except in the case of negligence or
wilful misconduct upon its part.
12.6 If, at any time, any provision of this Shares Charge is or becomes
illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Shares Charge nor of such provision under
the laws of any other jurisdiction shall in any way be affected or
impaired thereby and, if any part of the security intended to be
created by or pursuant to this Shares Charge is invalid, unenforceable
or ineffective for any reason, that shall not affect or impair any
other part of the security.
- 11 -
13. SUBSEQUENT SECURITY INTERESTS
If the Security Trustee (acting in its capacity as trustee or
otherwise) or any of the other Secured Creditors at any time receives
or is deemed to have received notice of any subsequent Security
affecting all or any part of the Charged Portfolio or any assignment or
transfer of the Charged Portfolio which is prohibited by the terms of
this Shares Charge or the Indentures, all payments thereafter by or on
behalf of the Chargor to or on behalf of the Security Trustee (whether
in its capacity as trustee or otherwise) or any of the other Secured
Creditors shall be treated as having been credited to a new account of
the Chargor and not as having been applied in reduction of the Secured
Obligations as at the time when the Security Trustee received such
notice.
14. ASSIGNMENT
The Security Trustee may assign and transfer all or any of its rights
and obligations under this Shares Charge in accordance with the
Security Trust and Intercreditor Deed. The Security Trustee shall be
entitled to disclose such information concerning the Chargor and this
Shares Charge as the Security Trustee considers appropriate to any
actual or proposed direct or indirect successor or to any person to
whom information may be required to be disclosed by any applicable law.
15. NOTICES
Each communication to be made under this Shares Charge shall be made
and delivered in accordance with the provisions of the Secured Trust
and Intercreditor Deed.
16. EXPENSES, COSTS AND TAXES
16.1 EXPENSES
The Chargor shall, from time to time and promptly on demand by the
Security Trustee reimburse to the Security Trustee all costs and
expenses (including legal fees) on a full indemnity basis together with
any applicable value-added tax incurred by the Security Trustee and any
Delegate (PROVIDED THAT in relation to sub-clause 16.1.1 of this Clause
16.1, such costs and expenses must be properly incurred) in connection
with:
16.1.1 the execution, release and discharge of this Shares Charge and
the Security created or intended to be created in respect of
the Charged Portfolio and perfection of the Security
contemplated in this Shares Charge or in any such documents or
forming part of the Security created or intended to be created
in respect of the Charged Portfolio;
16.1.2 the actual or contemplated exercise, preservation and/or
enforcement of any of the rights, powers and remedies of, or
the performance of the duties and obligations of, the Security
Trustee or any Delegate, or any amendment or waiver in respect
of this Shares Charge;
16.1.3 the foreclosure of any Charged Portfolio; and
16.1.4 the preservation and/or enforcement of the Security created or
intended to be created in respect of the Charged Portfolio,
- 12 -
which shall carry interest from the date of such demand until so
reimbursed at the rate and on the basis as mentioned in Clause 18.4
(Interest on Demands) of the Security Trust and Intercreditor Deed.
16.2 STAMP TAXES
The Chargor shall pay, promptly on demand of the Security Trustee all
stamp, registration, notarial and other similar Taxes or fees paid or
payable by the Security Trustee in connection with any action taken or
contemplated by or on behalf of the Security Trustee for perfecting,
enforcing, releasing, cancelling, reassigning or resolving any doubt
concerning, or for any other purpose in relation to this Shares Charge,
any amendment thereto, any transfer and/or assignment of the rights
and/or obligations under the same or the Security created or intended
to be created in respect of the Charged Portfolio and shall, from time
to time, indemnify the Security Trustee promptly on demand against any
liabilities, costs, claims and expenses resulting from any failure to
pay by the Chargor or any delay by the Chargor in paying any such Taxes
or fees.
16.3 CURRENCY INDEMNITY
If any sum (a "SUM") owing by the Chargor under this Shares Charge or
any order or judgment given or made in relation to this Shares Charge
has to be converted from the currency (the "FIRST CURRENCY") in which
such Sum is payable into another currency (the "SECOND CURRENCY") for
the purpose of:
16.3.1 making or filing a claim or proof against the Chargor;
16.3.2 obtaining an order or judgment in any court or other tribunal;
16.3.3 enforcing any order or judgment given or made in relation to
this Shares Charge; or
16.3.4 applying the Sum in satisfaction of any of the Secured
Obligations,
the Chargor shall indemnify the Security Trustee from and against any
loss suffered or incurred as a result of any discrepancy between (a)
the rate of exchange used for such purpose to convert such Sum from the
First Currency into the Second Currency and (b) the rate or rates of
exchange available to the Security Trustee at the time of such receipt
of such Sum.
17. PAYMENTS FREE OF DEDUCTION
All payments to be made to the Security Trustee, any Delegate and/or
any Receiver under this Shares Charge shall be made free and clear of
and without set-off or deduction for or on account of tax unless the
Chargor is required to make such payment subject to the deduction or
withholding of tax, in which case the sum payable by the Chargor in
respect of which such deduction or withholding is required to be made
shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, the person on account of whose
liability to tax such deduction or withholding has been made receives
and retains (free from any liability in respect of any such deduction
or
- 13 -
withholding) a net sum equal to the sum which it would have received
and so retained had no such deduction or withholding been made or
required to be made.
18. DISCRETION AND DELEGATION
18.1 Any liberty or power which may be exercised or any determination which
may be made hereunder by the Security Trustee or any Receiver may,
subject to the terms and conditions of this Shares Charge and the
Secured Trust and Intercreditor Deed, be exercised or made in its
absolute and unfettered discretion without any obligation to give
reasons.
18.2 Each of the Security Trustee and any Receiver shall have full power to
delegate (either generally or specifically) the powers, authorities and
discretions conferred on it by this Shares Charge (including the power
of attorney) on such terms and conditions as it shall see fit which
delegation shall not preclude either the subsequent exercise of such
power, authority or discretion by the Security Trustee or the Receiver
itself or any subsequent delegation or revocation thereof.
19. PERPETUITY PERIOD
The perpetuity period under the rule against perpetuities, if
applicable to this Shares Charge, shall be the period of eighty years
from the date of the Secured Trust and Intercreditor Deed.
20. RELEASE OF SECURITY
20.1 The Security Trustee shall, at the cost of the Chargor, release and
cancel the security constituted by this Shares Charge over the Charged
Portfolio and procure the reassignment to the Chargor of the property
and assets assigned (if any) by the Chargor to the Security Trustee
pursuant to this Shares Charge (except those which have already been
applied by the Security Trustee in accordance with the terms of this
Shares Charge) in accordance with the terms and subject to the
conditions and circumstances set out in the Secured Trust and
Intercreditor Deed and without recourse to, or any representation or
warranty by, the Security Trustee or any of its nominees.
21. GOVERNING LAW
This Shares Charge and all matters arising from or connected with it
shall be governed by and construed in accordance with the laws of Hong
Kong.
22. JURISDICTION
22.1 HONG KONG COURTS
The courts of Hong Kong have exclusive jurisdiction to settle any
disputes (a "DISPUTE") arising out of, or connected with this Shares
Charge (including a dispute regarding the existence, validity or
termination of this Shares Charge or the consequences of its nullity).
- 14 -
22.2 CONVENIENT FORUM
The parties agree that the courts of Hong Kong are the most appropriate
and convenient courts to settle Disputes between them and, accordingly,
that they will not argue to the contrary.
22.3 EXCLUSIVE JURISDICTION
This Clause 22 (Jurisdiction) is for the benefit of the Security
Trustee only. As a result and notwithstanding Clause 22.1 (Hong Kong
Courts), it does not prevent the Security Trustee from taking
proceedings relating to a Dispute in any other courts with
jurisdiction. To the extent allowed by law the Security Trustee may
take concurrent proceedings in any number of jurisdictions.
23. COUNTERPARTS
This Shares Charge may be executed in any number of counterparts, each
of which shall be deemed an original and this has the same effect as if
the signatures on the counterparts were on a single copy of this Shares
Charge. Any party may enter into this Shares Charge by signing any such
counterpart.
IN WITNESS WHEREOF this Shares Charge has been signed on behalf of the Security
Trustee and executed as a deed by the Chargor and is intended to be and is
hereby delivered by the Chargor as a deed on the date specified above.
- 15 -
SCHEDULE 1
PARTICULARS OF SHARES
BENEFICIAL OWNER SHARES (SHARES OF HK$10.00 EACH REGISTERED HOLDER
IN THE ISSUED CAPITAL OF THE
COMPANY)
Marconi Corporation plc 1 Marconi Corporation plc
Marconi Corporation plc 1 Associated Electrical Industries
Holding Limited (as nominee of
Marconi Corporation plc)
- 16 -
SCHEDULE 2
FORM OF ACKNOWLEDGEMENT FROM NOMINEE
To: The Law Debenture Trust Corporation p.l.c.
Dear Sirs,
At the request of Marconi Corporation plc (the "CHARGOR"), we hereby:
1. warrant and confirm that we are the registered holder of [insert number
and description of relevant shares] in G.E.C. (Hong Kong) Limited (the
"SHARE[S]") and are holding the Share[s] as nominee for and on behalf
of the Chargor;
2. acknowledge that the Chargor has, pursuant to a Shares Charge (the
"SHARES CHARGE") dated 2003 between the Chargor and you as Security
Trustee, charged the Share[s] in favour of you as security upon the
terms and conditions specified therein;
3. undertake that we shall, upon and at all times in accordance with the
Shares Charge after the enforcement of the security constituted by the
Shares Charge in respect of the Share[s] and being requested by you to
do so, hold the Share[s] to your order;
4. undertake that we shall, after the enforcement of the security
constituted by the Shares Charge and being requested by you to do so,
transfer the legal title in the Share[s] to you (or any other person
whom you may nominate) and do all acts and execute all documents as may
be necessary and/or as you may require for such purpose; and
5. irrevocably and unconditionally appoint each of you, any Delegate and
any Receiver (as defined in the Shares Charge) severally to be our
attorney on the terms of Clause 11 of the Shares Charge (mutatis
mutandis) as if we were the Chargor, and undertake to execute such
further powers of attorney to enable you or such Delegate or Receiver
to exercise your or its rights, powers and authorities in relation to
the Shares conferred pursuant to the Shares Charge or by law in such
form as you may reasonably require from time to time.
Date:
- 17 -
EXECUTED as a DEED )
by )
acting as attorney-in-fact ) [L.S]
for and on behalf of )
ASSOCIATED ELECTRICAL )
INDUSTRIES HOLDING LIMITED )
in the presence of: )
Signature of witness: __________________
Name of witness: __________________
Address: __________________
__________________
Occupation: __________________
- 18 -
SCHEDULE 3
FORM OF LETTER OF WAIVER AND UNDERTAKING
To: The Law Debenture Trust Corporation p.l.c. (the "SECURITY TRUSTEE")
G.E.C. (Hong Kong) Limited (the "COMPANY")
[address]
Date: [date of the Shares Charge]
Dear Sirs,
WAIVER OF RIGHTS OF PRE-EMPTION ON TRANSFER OF SHARES IN THE COMPANY (THE
"SHARES") UNDERTAKING IN RELATION TO THE ARTICLES OF ASSOCIATION OF G.E.C. (HONG
KONG) LIMITED (THE "COMPANY")
We, Marconi Corporation plc and Associated Electrical Industries Holding
Limited, being all the existing members of the Company, hereby:
(i) after the occurrence of an Enforcement Event (as defined in the Shares
Charge dated the same date as this letter made between the Company and
the Security Trustee) and at any time thereafter which such Enforcement
Event is continuing, waive and undertake to waive any and all rights of
pre-emption or other restrictions on transfer of Shares conferred on us
under the Articles of Association of the Company (including but not
limited to regulation 7 of the Articles of Association) or otherwise by
law; and
(ii) undertake not to propose or vote in favour of any resolution to add,
delete or amend any provision of the Articles of Association of the
Company relating to or in connection with rights of pre-emption or
other restrictions on transfer of Shares (including but not limited to
provisions relating to pre-emption rights on transfers of Shares or the
discretion of directors of the Company to refuse to register any
transferee of any Shares in the members' register of the Company).
- 19 -
EXECUTED as a DEED )
by )
acting as attorney-in-fact ) [L.S]
for and on behalf of )
MARCONI CORPORATION PLC )
in the presence of: )
Signature of witness: ___________________
Name of witness: ___________________
Address: ___________________
___________________
Occupation: ___________________
EXECUTED as a DEED )
by )
acting as attorney-in-fact ) [L.S]
for and on behalf of )
ASSOCIATED ELECTRICAL INDUSTRIES )
HOLDING LIMITED in the presence of: )
Signature of witness: ___________________
Name of witness: ___________________
Address: ___________________
___________________
Occupation: ___________________
- 20 -
SCHEDULE 4
FORM OF NOTICE TO THE COMPANY AND ACKNOWLEDGEMENT
To: G.E.C. (Hong Kong) Limited
From: Marconi Corporation plc
Date:
Dear Sirs,
We hereby give you notice that pursuant to a Shares Charge dated 2003 between
Marconi Corporation plc as chargor and The Law Debenture Trust Corporation
p.l.c. as Security Trustee (as amended and supplemented from time to time, the
"SHARES CHARGE"), we have assigned to The Law Debenture Trust Corporation p.l.c.
(the "SECURITY TRUSTEE"), by way of security, all of our right, title, interest
and benefit in and to any and all dividends, interest and other monies and
distributions receivable by us or our nominee from you ("DISTRIBUTIONS") in
respect of the Shares (as defined in the Shares Charge) from time to time.
Without prejudice to the foregoing, we hereby instruct you that with effect from
the receipt by you of a notice in writing from the Security Trustee stating that
an Enforcement Event (as defined in the Shares Charge) has occurred and until
you are notified by the Security Trustee that no Enforcement Event is
continuing, you shall pay and deliver any and all Distributions to the Security
Trustee (or to such person as the Security Trustee may specify in writing from
time to time).
The instructions contained in this letter may not be revoked or varied without
the prior written consent of the Security Trustee.
This letter is governed by and shall be construed in accordance with the laws of
Hong Kong.
Please acknowledge receipt of and agreement to the terms of this notice by
signing the acknowledgement on the enclosed copy of this letter and returning it
to the Security Trustee in accordance with the provisions of the Security Trust
and Intercreditor Deed.
Yours faithfully,
----------------------------
for and on behalf of
Marconi Corporation plc
- 21 -
FORM OF ACKNOWLEDGEMENT
To: The Law Debenture Trust Corporation p.l.c. as Security Trustee (the
"SECURITY TRUSTEE") and
Marconi Corporation plc (the "CHARGOR")
We acknowledge receipt of a notice in the terms set out above from the Chargor
and confirm that we have not received notice of any previous assignment or other
security of or over any of the right, title, interest and benefit in and to any
of the above-mentioned Distributions and that we will comply with instructions
of that notice.
We acknowledge and agree that the instructions contained in that notice may not
be revoked or varied without the prior written consent of the Security Trustee.
This acknowledgement is governed by and shall be construed in accordance with
the laws of Hong Kong.
Date:
----------------------------
for and on behalf of
G.E.C. (Hong Kong) Limited
- 22 -
EXECUTION PAGE
THE CHARGOR
SIGNED, SEALED AND DELIVERED )
By M XXXXXX )
as lawful attorney for and in the name of ) M XXXXXX [L.S]
MARCONI CORPORATION PLC )
in the presence of: )
Signature of witness: X.X. XXXXXX
Name of witness: X.X. XXXXXX
Address: XXXXX & XXXXX
XXX XXX XXXXXX
XXXXXX XX0X 0XX
Occupation: TRAINEE SOLICITOR
THE SECURITY TRUSTEE
THE LAW DEBENTURE TRUST ) X.X. XXXXX
CORPORATION P.L.C. )
By: X.X. XXXXX
